WASHINGTON A group of activists stood outside of the U.S. Securities and Exchange Commission's Washington headquarters on Thursday to scold the regulator for failing to advance a rule requiring companies to disclose their political contributions.
In an hour-long press conference on the SEC's doorstep, the Corporate Reform Coalition said that more than a million comments in support of a corporate political spending disclosure rule have been sent to the SEC, a number they called "record breaking."
Flanked by signs that read "Your money is being invested in secret. Why is the SEC doing nothing?" the activists accused the SEC of caving into pressure from Republicans who oppose a political spending rule and restrictions on campaign spending in general.
To date, SEC Chair Mary Jo White has not publicly expressed a view on the issue, though in the past she has said generally she opposes writing rules to exert "societal pressures on companies."
She has also noted the agency has a full agenda and is struggling to complete rules called for in the 2010 Dodd-Frank Wall Street reform act and other legislation.
"The SEC should closely consider a rule like this, rather than turning its back on investors' interests because of Republican objections," said Robert Jackson, a Columbia University law professor who along with other academics first submitted a public petition for the rule in August 2011.
"The SEC is an independent agency. They are charged with protecting investors - not politicians."
The effort by the activists dates back to the Supreme Court's 2010 Citizens United decision, which loosened campaign finance rules and opened the floodgates to millions of dollars in political spending by businesses and individuals.
The decision inspired a new wave of politically focused non-profit groups which are not required to disclose the identity of their donors.
A network of conservative groups backed by the billionaires Charles and David Koch, for instance, spent at least $400 million in the 2012 elections. Those "dark money" groups, organized under section 501(c) of the tax code, differ from so-called "Super PACs," which can advocate directly for candidates, but must disclose the identity of their donors.
"As we start to see the wave of dark corporate political money crest in the 2014 elections, the need for this rule has really never been more obvious," said Lisa Gilbert, the director of Public Citizen's Congress Watch, a nonprofit that promotes good government.
Activists at one point had hoped the SEC would take up a rule, after the agency's former Chair Mary Schapiro included the item on a list of her topic policy priorities in 2013.
Since then, however, the SEC's current Chair White had the item removed from the rulemaking agenda.
Republicans in the U.S. House of Representatives, as well as both SEC Republican commissioners, have staunchly opposed an effort to enact a political spending disclosure rule, saying campaign spending is not material for investors.
The renewed push by the activists and professors for action on a rule targeting public company spending comes at the same time that the SEC is also facing a legal battle with Republicans over "pay-to-play" rules that limit investment advisers from making campaign contributions.
Last month, Republicans in New York and Tennessee sued the SEC to block a 2010 rule prohibiting investment advisers from making campaign contributions in exchange for contracts to manage public pension funds, saying the rule violates their free speech rights.
The SEC will face off in court against the Republicans on Sept. 12.
(Reporting by Sarah N. Lynch; Additional reporting by Andy Sullivan; Editing by Lisa Shumaker)